If the Beers exercises its option, both companies will be bounded by the following terms of the agreement:

De Beers is required to invest $58.5 million into Chidliak to earn a 50.1% interest in the Project, with a minimum work commitment of $37 million.

De Beers is to finance all work at Chidliak from when they enter into the Joint Venture until the completion of the BFS, inclusive of appropriate environmental impact studies necessary for evaluating the feasibility of commercial diamond production. De Beers will use commercially reasonable efforts to deliver the BFS in a timely manner, subject to force majeure provisions.

Peregrine is to reimburse De Beers 49.9% of all Chidliak costs in excess of $58.5 million, the point at which De Beers has earned its 50.1% interest, to completion of the BFS. Reimbursement will consist of an aggregate of $25 million payable in four escalating staged payments at certain milestones beginning with the approval by the participants of the completed BFS and ending with the completion of mine construction, with the balance payable from 66% of Peregrine's attributable after tax cash flow from a diamond mine at Chidliak.

Should De Beers decide to exit the Joint Venture prior to completion of the BFS, Peregrine can purchase De Beers' unencumbered earned interest in Chidliak for De Beers' expenditures on the Project, less $20 million, under a payment schedule similar to that outlined above.

Both De Beers and Peregrine hold mutual pre-emptive rights over the sale of any interest in Chidliak.

Following De Beers' earn-in, annual work programs and budgets will require unanimous approval of the participants.

Each participant is to retain diamond marketing rights for their respective share of production.

Last week, a bullish plan to revitalize Nunavut’s Jericho diamond mine, which last functioned from 2006 to 2008, was put on hold as Canadian-based Shear Diamonds (CVE:SRM) decided to halt production at the site, only months after it restarted operations.

BHP, the globe's biggest mining company, launched a review of its diamond operations late last year with an eye to sell most or all of its assets. BHP has already off-loaded its Chidliak exploration project in Canada to Peregrine Diamonds.

Rio Tinto followed in March saying that it was reviewing its gem business, potentially selling it all off.

Apart from the changing strategy of BHP and Rio, the founding family of De Beers recently sold out completely from the company synonymous with diamonds after three generations steering the business. The $5.1 billion deal, announced in November, was completed in early August.

Russia’s Alrosa overtook De Beers in 2009 as the world’s number one supplier of rough gems after decades of being a secretive, state-owned organization in the process of readying for a global public offer.